UNITED STATES, WASHINGTON (OBSERVATORY) — The Saudi-led military coalition in Yemen said on Monday that weapons used in attacks on oil facilities in the kingdom were “Iranian”, fueling fears of a regional conflict after Washington signaled a military response to the operation.
The attacks on Abqaiq, where the world’s largest oil processing plant and the Khurais oilfield are located in the east of the kingdom, have caused record high crude prices in troubled global markets.
Houthi rebels fighting the military alliance in Yemen claimed responsibility for Saturday’s attacks, but the United States blamed Iran, with President Donald Trump saying his country was “ready” to respond.
Saudi oil facilities have been attacked in recent years, but the attacks on the Abqaiq and Khurais fields in the east are different in size and impact, cutting Saudi production by half to 5.7 million barrels per day, equivalent to about 6 percent. Of global supplies.
In the wake of this escalation, Moscow called on the international community to “refrain from any hasty action or conclusion that could aggravate the situation,” while the European Union called for “restraint.”
NATO Secretary General Jens Stoltenberg also expressed “grave concern” over the escalation that could follow an attack on Saudi oil facilities.
China also considered that “in the absence of a final investigation to draw conclusions, it may not be responsible to imagine who should be held responsible” for the attacks.
At a weekly press conference in Riyadh, coalition spokesman Colonel Turki al-Maliki said that “preliminary investigations into the terrorist attack on Khurais and Abqaiq indicate that the weapons used are Iranian.”
“The terrorist attack was not from inside Yemen, as the Houthi militias have claimed,” he said, adding that “Houthi militias are just tools in the hands of the Iranian Revolutionary Guards.”
Yemeni rebels said they had attacked oil facilities with 10 drones, but the New York Times reported that US officials had obtained satellite imagery showing that the operation, possibly carried out by planes and cruise missiles, had been launched from the north or northwest of the kingdom.
She considered that this analysis leads to believe that the starting point of the attacks is in the northern Gulf, ie Iran or Iraq, and not Yemen in the south.
– An unprecedented attack –
Washington called the operation “an unprecedented attack on global energy supplies.”
Oil prices saw their biggest rally since 1991 and the Gulf War on Monday amid fears of mounting regional tensions.
The price of a barrel of oil rose 20 percent in London, where Brent North Sea oil traded, and 15 percent in New York light sweet crude (Light Sweet Crude).
Prices fell during the day, but remained more than 10 percent higher in Europe.
US Energy Secretary Rick Perry stressed that global oil markets are still able to secure their requirements from large oil stocks.
Saudi Energy Minister Prince Abdul-Aziz bin Salman also announced that the kingdom would use its huge stockpiles to partially offset the decline in production.
“The escalation of tensions in the Middle East is a negative factor for the global economy in difficult times,” said Jennifer McCon, an expert at the Center for Capital Economics.
Financial analyst Craig Arlam also said Saturday’s attacks showed the fragility of oil installations in the face of drones, as the rebels threatened new strikes.
Saudi Arabia pumps 9.9 million barrels per day, or nearly 10% of global demand, including 7 million barrels for export.
The kingdom also has an unused capacity of about 2 million barrels per day that it can use in times of crisis.
Delays in normalizing production could push prices above $ 100, economist Suleiman al-Assaf warned.
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Saudi authorities are keen to pump back as soon as possible as the attacks undermine investor confidence in Aramco, the giant that is preparing to go public.
Riyadh hopes to raise up to $ 100 billion by selling 5 percent of the company’s capital, based on an estimated value of $ 2 trillion.
But informed sources said on Monday that Saudi authorities were considering the possibility of delaying the offer against the backdrop of the attacks.
“They are assessing the damage. It is a possibility but it is still too early,” said a source who asked not to be named.
Another source said no decision had been taken, confirming Wall Street Journal information.
Saudi authorities have tried to calm the markets. Energy Intelligence, citing industry sources, said Aramco was “on the verge of recovering up to 40%” of lost production, about 2.3 million barrels a day.
The extent of the actual damage to the oil facilities is not known. Sources for the Wall Street Journal have suggested that it may take weeks to reproduce pre-attack levels.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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